Historically, the UK has been a very competitive market for the food and beverage (F&B) sector, meaning that a number of international F&B operators have been circling for some time without being able to secure sites.
But market conditions in the UK have become more challenging recently, with rises in business rates and the living wage, staff retention issues and Brexit-related uncertainty all contributing to this. As a result, less competition from UK operators has given international F&B brands the chance to move in.
Chinese hot pot chain Hai de Lao, which has been keen to enter the UK market via a site in London for a number of years, recently acquired restaurant space at The Trocadero in Piccadilly Circus in a deal secured by Savills. This restaurant will become Hai de Lao’s UK flagship as the brand seeks further sites in major European cities.
Following huge success in Poland (opening more than 40 sites since 2002), North Fish will start opening UK sites from 2019. The quick service restaurant chain, which specialises in healthy fish and seafood dishes, is targeting high street and shopping centre locations. Norwegian restaurant brand Egon is also known to be seeking its first UK sites.
High-footfall, high-profile locations are ultimately what operators desire and it is hugely important to get the first site right so that it can act as a spring board for future growth. Among the most established European cities for F&B are London, Paris, Berlin, Milan and Barcelona while ‘ones to watch’ in the next few years will include Oslo, Frankfurt, Rome, Manchester and Birmingham.
The majority of international new entrants to the UK are relatively high end, with a focus on quality and service, or ‘grab-and-go’ operators, such as Ole & Steen (Danish), Simit Sarayi (Turkish), Nordic Bakery (Scandinavian) and Cojean (French), which all focus on speed of service. Few occupy the middle ground and this reflects consumer appetite in the UK. Successful new entrants also tend to focus on one style of product and do it extremely well, rather than trying to cater to the masses.
Meanwhile, not only are UK market conditions presenting new opportunities for international F&B brands, other well-established names that already have strong representation in the UK, such as Vapiano, Wagamama and Five Guys, are now looking to grow their various portfolios across key European destinations and ultimately increase revenue by entering new markets.
With plenty of appetite for further expansion, more movement of international F&B operators into the UK and Europe is almost certainly on the menu for 2019 and beyond.
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